Bulletin C-07-4

To: ALL INDUSTRIAL LOAN AND THRIFT COMPANIES

ALL MORTGAGE LENDERS

ALL MORTGAGE LOAN BROKERS

ALL MORTGAGE LOAN SERVICERS

Subject: Statement on Subprime Mortgage Lending

Date: September 6, 2007

The Department of Financial Institutions is issuing this Bulletin for the purpose of announcing that the Department has adopted the Statement on Subprime Mortgage Lending (the "Subprime Statement") that was issued July 17, 2007, by the Conference of State Bank Supervisors ("CSBS"), the American Association of Residential Mortgage Regulators ("AARMR"), and the National Association of Consumer Credit Administrators ("NACCA"). The Subprime Statement substantially mirrors the interagency guidance published by federal banking regulators on June 29, 2007.

At this time, the Department's adoption of the Subprime Statement is on an informal basis as a guide to "best practices." The Department strongly believes that adherence to the Subprime Statement will not only better protect consumers and promote consistent regulation of the residential mortgage market, but will also enhance the overall safety and soundness of the residential mortgage industry.

Through the examination process, the Department will review the operations and practices of licensees and registrants in order to determine how their current operations and practices relate to the Subprime Statement. After this initial review is completed, the Department will assess the results and make a determination as to what degree of regulatory application at that time is most appropriate to ensure adherence to the Subprime Statement.

During the initial review process, comments from the industry are solicited and welcomed.